When the mafia extorts money from you to allow you to live, they call it "protection money." When the government does it, they call it "consumer protection." Either way, you are paying for protection from someone who has the power to take everything you have.

Tuesday, February 25, 2014

Remember the furor over the existence of WMD's in Saddam Hussein's Iraq? George W. Bush asserted, based on reports that actually hailed back to his predecessor, that Hussein was in possession of weapons of mass destruction and that these made him an imminent threat. This assertion was much of the justification for the invasion of Iraq and the subsequent decade-long war. When the weapons were not found, the media and many Americans cried foul, arguing that Bush had deliberately misled the country in order to pursue his own personal and political agenda. Eventually the evidence for or against the WMD's became more of a central focus than the war itself or the dissolution of the Hussein government.

Now, let ME be clear--this post (and the one to follow) are not referendums on the war or whether we should have invaded Iraq. But considering the political hay that the left made over the specific term, "weapons of mass destruction" I find it odd that Secretary of State John Kerry has recycled exactly this same argument as a justification for the Obama Administration's newest push for climate-change legislation via executive fiat and agency regulation.

Speaking in Jakarta, Indonesia, on February 16, Kerry described climate change as a threat to the way of life of all people, and a "fearsome weapon of mass destruction," while denouncing skeptics as "shoddy scientists" and "extreme ideologues." "The bottom line is this: it is the same thing with climate change. In a sense, climate change can now be considered another weapon of mass destruction, perhaps even the world's most fearsome weapon of mass destruction." Obama had previously dismissed critics of his administration's policies regarding man-made climate change saying that his administration does not have time to attend meetings of the "flat earth society."

The Obama Administration's new line is that man-made climate change is a "settled science" and that the time has come for Obama to use his now infamous phone and pen to save us from Armageddon via draconian new regulations. With that in mind, I want to introduce to you four prominent climate-change skeptics from the scientific community. Although the Obama Administration dismisses all those who disagree about man-made climate change as "shoddy" scientists, these four prove that there is a lot of disagreement in the scientific community about the "science" of global warming. You can use their resumes to defend yourself in your next argument with liberal friends and co-workers. And if you plan events for a local chapter of the "Flat Earth Society" you might consider inviting one of these men or women to speak to your group. :)

JUDITH CURRY: A professor and chairwoman of the School of Earth and Atmospheric Sciences at the Georgia Institute of Technology.

Because of her impressive resume, Curry was called to testify about man-made climate change before the U.S. House of Representatives last summer. According to NPR.org, her message that day on Capitol Hill was, in essence, that while humans may be contributing to climate change, we simply don't know how the climate will behave in the coming decades, so there may be no point in trying to reduce emissions. In her interview with NPR she explained that there is no way to predict how the climate will look in a few decades, and she is more concerned with the immediate economic impacts of climate change legislation on her six nieces and nephews who deserve an opportunity to build a sound and prosperous economic future. Read Judith Curry's interview on NPR.org.

DR. WILLIAM HAPPER: Award-winning Princeton Professor of Physics, former Director of Energy Research at the Department of Energy from 1990 to 1993, author of over 200 published scientific papers, and a fellow of the American Physical Society, the American Association for the Advancement of Science, and the National Academy of Sciences. Happer was reportedly fired by former Vice President Al Gore in 1993 for failing to adhere to Gore’s scientific views. In 2009 he testified before Congress about CO2 levels:

“Many people don’t realize that over geological time, we’re really in a CO2 famine now. Almost never has CO2 levels been as low as it has been in the Holocene (geologic epoch) – 280 (parts per million - ppm) – that’s unheard of. Most of the time [CO2 levels] have been at least 1000 (ppm) and it’s been quite higher than that."

“Earth was just fine in those times,” Happer added. “The oceans were fine, plants grew, animals grew fine. So it’s baffling to me that we’re so frightened of getting nowhere close to where we started,” Happer explained. Happer also noted that “the number of [skeptical scientists] with the courage to speak out is growing” and he warned “children should not be force-fed propaganda, masquerading as science.”

“I keep hearing about the ‘pollutant CO2,’ or about ‘poisoning the atmosphere’ with CO2, or about minimizing our ‘carbon footprint.’ This brings to mind another Orwellian pronouncement that is worth pondering: ‘But if thought corrupts language, language can also corrupt thought.’ CO2 is not a pollutantand it is not a poison and we should not corrupt the English language by depriving ‘pollutant’ and ‘poison’ of their original meaning." (Emphasis added.)

Most recently, in January of 2014, in an exclusive interview with Climate Depot, Happer spoke out against the notion being popularized by the media that the extremely cold winter weather conditions and polar vortex were the result of man-made climate change saying, "Polar vortices have been around forever. They have almost nothing to do with more CO2 in the atmosphere.” LARRY BELL: professor and endowed professor at the University of Houston where he founded and directs the Sasakawa International Center for Space Architecture and heads the graduate program in space architecture.

Bell is author of Climate of Corruption, Politics and Power Behind the Global Warming Hoax and a regular contributor to Forbes. He has written extensively about Agenda 21 and the threat that legislation aimed at stopping global warming and man-made climate change pose to U.S. sovereignty, American freedom and our way of life.

This picture is far different from the really scary “climate crisis” reports we constantly receive in the media. And this circumstance isn’t the first time prominent news producers, supported by “scientific experts”, have warned about impending doom. An October 7, 1912 Los Angeles Times feature proclaimed “Fifth Ice Age is on the Way: Human Race Will Have to Fight for Existence in Cold”. By August 9, 1923 the situation had become desperate, prompting the Chicago Tribune to declare “Scientists Say Arctic Ice Will Wipe Out Canada”. Then, after a short period when the world appeared to be warming again, the March 1, 1975 cover of Science News magazine depicted New York City being swallowed by a glacier. The New York Times followed with a headline story “Scientists Ponder Why World’s Climate is Changing: A Major Cooling Widely Considered to be Inevitable”. The prestigious National Academy of Sciences agreed: global cooling was a real threat.

RICHARD LINDZEN: Alfred P. Sloan professor of meteorology at MIT, senior fellow at the Cato Institute, Professor Emeritus at MIT. Lindzen won numerous awards in the 1970’s for disproving an accepted theory about how heat moves around the Earth’s atmosphere. Accepted to the National Academy of Sciences before he was forty years old, he moved to MIT in the 1980’s.

In the 1990’s he was invited to join the United Nations’ IPCC (Intergovernmental Panel on Climate Change), where he helped to author a report in 1995 on climate change and co-authored chapter 7 of the 2001 report on climate change.

Lindzen left the IPCC after he claims the panel rewrote his work, and while he does not dispute that people have some impact on the climate, he says that impact is very small.

In part, Lindzen takes exception to the IPCC's entire process. Though the panel claims that more than 2,500 respected scientists and policy makers work together to produce its climate change assessments, Lindzen argues that less than a tenth of these ‘experts’ actually hold qualifications in climatology. Instead, most are educated in political and social sciences. The panel that edits and approves the reports are appointed by the United Nations; more than half are actually UN officials, and they rewrite the Summary for Policymakers to reflect political and social agendas rather than scientific realities.

"It's not 2,500 people offering their consensus, I participated in that. Each person who is an author writes one or two pages in conjunction with someone else. They travel around the world several times a year for several years to write it and the summary for policymakers has the input of a handful of scientists, but ultimately, it is written by representatives of governments, and of environmental organizations, each pushing their own agendas."

In an interview with The Weekly Standard for a piece entitled "What Catastrophe?" published in January 2014, Lindzen adds that the IPCC reports contains significant doubts from various participants about the scope and consequences of man-made climate change, but these are scrubbed from the Summary which "rips out doubts to a large extent. . . . [Furthermore], government representatives have the final say on the summary."

And the reason for all of the editing and scrubbing and monolithic messaging of climate change as the threat to mankind? Lindzen says it all comes down to money.

After World War II, the nation was grateful to the scientific community for their contributions to ending the war, and funding for many projects was flowing. After Vietnam, however, "it was recognized that gratitude only went so far,” Lindzen says, “and fear was going to be a much greater motivator. And so that’s when people began thinking about . . . how to perpetuate fear that would motivate the support of science.” As the scientific community began looking for scary-sounding projects that would drive funding, they settled on climate change.

What is scary is that all scientists who are openly skeptical of man-made climate change and its apocalyptic threat to the future of mankind are demonized as inept fools who deny that the earth is round, while proponents like Al Gore, whose most notable achievements are having served eight years as Vice President and having invented the internet (wait, I think there might be some disagreement about that second one!) win the Nobel Prize.

And so we are embarking on a new war, justified by rumors of weapons of mass destruction. But this time, the enemy to be vanquished is American prosperity. More on that tomorrow.

Thursday, February 13, 2014

Update: As of February 19th, there has been yet another suicide. Monday, February 17th, another Chase investment banker, 37-year-old Ryan Crane, committed suicide by jumping thirty stories to his death. He was stationed in Hong Kong.

The rash of suicides from bankers and investment advisers that has taken place over the last two weeks is catching the attention of industry publications like Housing Wire and Business Times. When I first saw this story a few days ago I did not pay it much attention. Then this morning I saw a snippet about it again with a commentary that some of these deaths might not actually be suicides. My interest was piqued, and I decided to look up the details. Something truly strange is happening here, and it makes all of us who watch the housing and finance industry wonder what is coming next.

Housing Wire's financial reporter Trey Garrison first reported this story on January 31, 2014 when 50 year old Mike Dueker, a former Federal Reserve Economist was found dead from in Tacoma, Washington. The death was an apparent suicide. At the time of his death, Dueker was the chief economist for Russell Investments and he had been missing since January 29, 2014.

A few days before, on Sunday January 26, fifty-eight year old William Broeksmit, a former senior manager for Deutsche Bank, was found in his home dead of apparent suicide. The following Tuesday, 39 year old Gabriel Magee, a vice president at JP Morgan Chase's London headquarters, apparently jumped to his death from a building in Canary Wharf.

Garrison reports that all of these men worked for companies that were under investigation for fraud, but as the San Francisco Business Times points out in their commentary, the list of companies not under investigation is getting shorter and shorter. Russell Investments was being investigated by New York State banking regulator Benjamin Lawsky, who had subpoenaed its records in an attempt to discover if there were any impropriety in the way that advisers recommended pension-fund investments. (This is the same Lawsky I mentioned in yesterday's post who is publicly suspecting Ocwen Servicing of wrongdoing simply because their efficiency is "too good to be true.") Specifically, Lawsky wanted to determine whether the advisers were receiving any type of benefits from the companies they recommended including job offers or payments in kind. Deutsch Bank and JP Morgan Chase are also under investigation.

The parents of Gabriel Magee are apparently arguing that they do not believe that their son committed suicide and questioning many aspects of the suicide findings, including how Magee could have made his way to the roof of the building.

Most bizarre is the February 4th death of fifty-six year old Richard Talley, founder and CEO of American Title Services in Centennial, Colorado. Talley was found shot to death "seven or eight times" with a nail gun. Colorado authorities have ruled his death a suicide also. (How many people do you know who would commit suicide that way? ) American Title Services is under investigation by Colorado authorities.

That is four deaths of prominent individuals in financial services and real estate in two weeks. Just a series of unlikely coincidences, or is something bigger coming that we need to be aware of? At this point nobody knows, but this is all definitely very strange.

Wednesday, February 12, 2014

Of all the exasperating creatures on this planet, there is none so strange and difficult to comprehend as the American liberal. They see the world through a lens which apparently strips away all logic and common sense and allows them to make recommendations completely devoid of past experience or future expectations.

One day apart I found two striking examples of this absurdity. The first comes from Massachusetts Senator Elizabeth Warren. You may remember that this former professor was one of the architects of the Dodd Frank bill which has destroyed small mortgage businesses and crafted rules which have shut millions of Americans permanently out of the mortgage markets. Warren was the first interim director of the Consumer Financial Protection Bureau, but due to her extreme left-wing political views she was not deemed suitable for confirmation in the U.S. Senate as a permanent director of the agency. (And those same extreme left-wing political views made her the ideal senator from Massachusetts, so the story turned out just fine for her.)

Since becoming senator, Warren has proposed a number of ridiculous, unworkable ideas including raising the minimum wage to $22.00 an hour. Now, she is back with a doosy of a suggestion--turn the bloated, inefficient, and financially insolvent United States Post Office into the nation's newest banking system.

The idea here is that the Post Office can generate $9 billion annually by providing financial services to the nation's "underserved" citizens who are currently using payday loans. The U.S.P.O. could offer prepaid debit cards, a bitcoin exchange, mobile money transfers and small loans. Proposed interest rates for these loans would be in the mid-20% range, which is significantly lower than the interest rate on payday loans and possibly substantially too low considering the risk involved in such loans. Breitbart's Christopher Whalen notes that the average default rate on payday loans is around 50% and then cites a 2007 report explaining why payday lenders are able to cover this risk:

First, over half of payday borrowers default on a payday loan within one
year of their first loans. Second, defaulting borrowers have on average
already repaid or serviced five payday loans, making interest payments
of 90% of their original loan's principal.

Of course, Warren and her compadres aren't worried about default because they are planning to have the IRS collect any unpaid amounts by withholding tax refunds due to the borrowers.

Never mind that the U.S. Postal Service is a byword for waste and inefficiency. Never mind that, as Whalen correctly points out, bringing in $9 billion in revenue does not translate into $9 billion in profit. Never mind that an agency that can't successfully compete with private mail carriers now wants to approve loans and sic the IRS on those who can't pay. None of this matters to the staunch liberals like Warren. What is important is that the Post Office is a branch of the federal government and government is deeply, inherently, instinctively good.

Contrast this with a story that appeared today in the National Mortgage News about Ocwen Servicing.At this month's annual meeting of the New York Banker's Association, New York's banking regulator, Benjamin Lawsky, verbally attacked Ocwen--while never naming them specifically he made sure that all industry participants in the room knew exactly whom he meant. What did Ocwen do to deserve being singled out for a public thrashing? According to Lawsky, Ocwen's "explosive" growth in the area of mortgage servicing "raises red flags" and the company's investment in technology to better serve distressed borrowers is "too good to be true." Ocwen has announced to its investors that it has identified $400 billion in servicing rights to loans it plans to acquire in 12 to 18 months and that $1 trillion will change hands within a few years. To Lawsky, that growth signals that Ocwen must be doing something wrong. Most of all, Lawsky is offended by Ocwen's claim that it can service delinquent loans at a cost 70% lower than the rest of the industry. "These kinds of cost-saving claims bear special scrutiny...Regulators have to ask whether the purported efficiencies at non-bank servicers are too good to be true."

I don't know whether Ocwen's claims about its abilities to service loans effectively and cheaply are true--I have never had any experience with Ocwen on the servicing side. I do know that this is a private company--a non-bank lender--that is experiencing rapid growth at a time when many in the private mortgage sector are suffering. To liberals, that makes Ocwen evil. Never mind that they have invested in cost-cutting technology. Never mind that there is no public evidence that Ocwen's claims are untrue. What is important is that Ocwen is a privately-owned company that is making money, and private companies that are profitable are deeply, inherently, instinctively bad.

What is absurd in both cases is the Post Office is being rewarded for their gross inefficiency while Ocwen is about to be punished for their profitability. (Punished at least in the sense that Lawsky is signaling an unwillingness to allow the company to acquire new servicing rights--at least in the short term). The evidence of Ocwen's wrong doing is that they are turning a profit--a fact of which no will ever be able to accuse the Post Office. This could only make sense to a liberal.

When the mafia extorts money from you to allow you to live, they call
it "protection money." When the government does it, they call it
"consumer protection." Either way, you are paying for protection from
someone who has the power to take everything you have.

Monday, February 10, 2014

A few years ago I wrote a post entitled,Suze Orman is Wrong, Don't Walk Away. That post is my all-time highest-read post in the nearly four years that I have been writing this blog. The content of that post was a response to a practice called "strategic default" which encouraged homeowners to walk away from mortgages they had the ability to pay on properties that had lost value. As the idea of "strategic default" grew popular and as housing values sank, more and more property owners began to toy with the idea of "letting their houses go" simply because they had no equity or now had negative equity, and Orman encouraged homeowners to do so. I wrote that this is a terrible idea, and that homeowners who have the ability to pay for their homes should do so.

Three years later, a lot has changed. I still stand by the original article--no one should stop paying a mortgage simply and solely because their equity has dropped in the house. For those who are worried about negative equity, property values are rising nationwide, and housing prices are correcting, so negative equity is going to be much less of a problem than it was three years ago. However, as Obamacare strips hours from the workforce and turns more and more people into part-time employees, and as the workforce participation continues to drop, unemployment and inability to cover expenses is going to be a growing problem for many Americans. Right now there are an estimated 92 million unemployed Americans--almost one-third of our workforce. Each month the jobless numbers reveal a stagnant economy. Last week we learned from the CBO that Obamacare will cost our economy an additional 2.5 million full-time jobs over the next ten years. Bearing in mind that unemployment filings do not include self-employed business owners who pay unemployment taxes in their states but are ineligible to file for unemployment when their businesses fail, our country has serious economic issues. A real-life consequence of long-term unemployment and being unable to secure new work at pay commensurate to your previous position is often mortgage delinquency and foreclosure. For that reason, I have decided to write this follow-up post to help anyone who is unemployed or underemployed and struggling with mortgage delinquency and foreclosure. I hope that no one reading this has to experience loss of a home through financial crisis, but if you do so, hopefully this information will help you.

First, you need to communicate with your mortgage company as soon as you realize that the mortgage is going delinquent. Although it sounds trite, mortgage servicers in 2014 really are under pressure from the government not to foreclose, so the sooner you talk to your mortgage company and complete the paperwork that they send you, the sooner you may be able to find some kind of resolution. And there are solutions that can help you avoid foreclosure, even if you still lose your home.

Your mortgage company will assign you to a specialist, but you will probably continue to receive mail with conflicting messages from other departments of the company. Stay in touch with your assigned specialist and let him or her know about each document your receive. Because multiple departments are at work attempting to collect your mortgage payment, you may receive multiple, conflicting messages from various departments about the state of your mortgage. Likewise, you may receive notices that you have been turned down or denied for specific programs that you have requested when in fact your request is actually being processed. Let your specialist know about each offer you receive--don't take for granted that a letter or an offer or even a denial for assistance is correct just because the mortgage company has sent it out.

If you have a good solid payment history with your mortgage company prior to the loss of income, they may offer you a forbearance--an opportunity to waive the payments for a set period of time--or a loan modification. Bear in mind that if you take a loan modification you and the lender are doing so with the understanding that you can make the payments on time for at least six months, so you need to make certain that you are working again before you enter into such an agreement. If you do not successfully complete the modification process, your loan will be referred for foreclosure.

Under the Dodd-Frank servicing rules, you cannot be referred for foreclosure until you have missed 120 days of payments--four months. If during that time you are able to secure new employment, you may be able to get a modification with a lower payment based on your new income. If after 120 days you are still not employed, you may need to look at your other alternatives--a short sale or a deed in lieu of foreclosure.

When I wrote theSuze Orman piece, lenders and credit providers were looking at short sales and deeds in lieu of foreclosure the same as they did a foreclosure. For that reason, homeowners had little incentive to try to avoid foreclosure through either of these methods. This is no longer the case. New guidelines released last year allow a homeowner who has successfully completed a short sale or a deed in lieu of foreclosure to secure Fannie Mae or Freddie Mac financing for a new home in two years, provided that you have a new job and have worked out your other credit issues. If at all possible, you want to avoid a foreclosure for several reasons:

1. It's horrible for your credit. A foreclosure will shut you out of Fannie Mae or Freddie Mac financing for seven years--although I believe that FHA still has only a three year moratorium on financing a homeowner who has been through a foreclosure. A foreclosure can have a long-lasting impact on your ability to get anything financed.

2. You may have tax consequences. If you go through a foreclosure, the mortgage company can send the IRS a 1099 for the difference between what you owed on the house and the amount they received for it at the foreclosure sale. That 1099 is reported as income to you. In other words, if you owe $150,000 on your home and the mortgage company receives $100,000 in the foreclosure sale, you are liable for the taxes on $50,000 of "income". (If you can prove that you were insolvent at the time the foreclosure took place, you may not have to pay the taxes, but you will probably have to hire a tax attorney to make your case for you.)

3. In some states, the mortgage company can file a deficiency judgment against you for the difference between the debt you owed and what they received when the house was sold. In my example above, that would mean a $50,000 judgment. Such a judgment can effectively keep you from ever buying another home, getting an SBA loan to start a business, or securing certain professional licenses or jobs that require credit and background checks.

If all else has failed, a short sale or a deed-in-lieu of foreclosure are your two primary alternatives. For the short sale you need a contract from a pre-approved borrower and you need to send that to the mortgage specialist assigned to you by the mortgage company. Remember that the mortgage company has to approve the short sale since they are agreeing to take less than the balance owed to let you sell the home. Short sales were very popular a few years ago, but over the last few months, mortgage companies have begun refusing short sales on the grounds that they make more money through their REO's. As values have risen across the country, mortgage companies are increasingly taking the view that property values are rising, and they won't sell the house for less than is owed. Of course, in practical terms, the fact that values are rising nationally does not mean that they are rising in your specific spot on this planet. There could be a very real problem in your development or subdivision which prevents you from getting an offer that will match what you owe on the house, regardless of how nice your individual property is. If they decline your short sale, then you need to ask for a deed-in-lieu of foreclosure (a mortgage release.)

A mortgage release will release you from all liability in the property. The mortgage company does not have the legal expense of foreclosure; you do not have any liability for any losses they incur. To secure a release, you need to have a property that is clean and in good condition. You will have to vacate the property before they send a third-party inspector. The title must be clear of defects--you cannot have a second lien, mechanics' lien or tax lien. If the property and the title pass inspection, you can deed the property back to the mortgage company, and they will release you from any future claims. This is a good solution if you need to move to another area for work, if you cannot secure employment that will allow you to cover the payments on your mortgage, or if you have a house you simply cannot sell at a price which will cover the mortgage.

If you have a mortgage secured by either Fannie Mae or Freddie Mac and you are not getting the help you need, surprisingly these two agencies may be able to help you. A counselor from Fannie or Freddie can work with your mortgage company to cut through the red tape and get them to be responsive so that you don't end up in foreclosure. Again, communication is key here--when you get the letters from Fannie Mae or Freddie Mac offering assistance, call the number provided and explain your situation as clearly and accurately as possible.

If none of these options works for you, and you are going through the foreclosure process, you may still be able to save your property by enlisting the help of a foreclosure attorney. In states that require judicial foreclosure, foreclosure is a long process, and an attorney can buy you some time while you get back on your feet. He or she may also be able to stop the foreclosure process and get your payment reinstated when you are able to find a job.

Loss of a property is devastating, but by knowing your options and how to navigate the red tape you may be able to salvage your future finances and get through this process with the minimum amount of suffering, so that you can get on with your life.

When the mafia extorts money from you to allow you to live, they call
it "protection money." When the government does it, they call it
"consumer protection." Either way, you are paying for protection from
someone who has the power to take everything you have.

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About Me

In 1986, Alexandra Swann graduated at fifteen years of age with a bachelor’s degree in liberal arts from Brigham Young University and a GPA of 3.85. The following year, when she was sixteen, she received a Master’s Degree in History from California State University. After graduation, she taught history and English as a second language for four years at El Paso Community College. In 1989, her book, No Regrets: How Homeschooling Earned Me a Master's Degree at Age Sixteen, was published, in which she details her experiences with homeschooling. In 1993, the Swann Family was featured in the CBS Television Series, “How’d They Do That?”They were the subject of articles in The National Enquirer and Woman’s World, and were featured on Paul Harvey’s radio broadcast.

For fifteen years, from 1998- 2013, Alexandra was self-employed in the financial services industry in El Paso, Texas. As a small business owner who was active in the community and on various civic boards, she learned first-hand the challenges that excessive regulations create for small businesses. In 2012 she received the SBA’s Regional Minority Small Business Champion of the Year award.

In 2010, Alexandra and her mother incorporated Frontier 2000 Media Group to produce clean, wholesome, inspirational entertainment for families.She re-released No Regrets with a new foreword to the twentieth anniversary edition of the book updating readers on what her family is doing today. She is also co-author of four novels including The Fourth Kingdomwhich was selected as one of four finalists in the Christianity Today 2011 Christian Fiction Book Awards. Her solo novel, The Planner about the dangerous consequences of progressive big government and Agenda 21, was released in June of 2012. For more information visit her website at http://www.frontier2000.net